Collision Coverage Author:    Posted under: Auto InsuranceAuto Insurance Types


What is Collision Coverage?

Collision Coverage is an insurance policy that covers damage to your car when you hit your car, or is hit by another vehicle, or other object. Basically, this coverage pays to fix your vehicle a lesser amount of the deductible you choose. To keep your premiums low, select as large a deductible that will work for your financial limit. For cars that are much older, you may consider dropping this coverage, since this coverage is usually limited to the cash value of your car. This coverage however, is limited to the terms and conditions contained in the policy.

Collision coverage is provided for automobiles and other forms of transportation where there is the chance of an accident involving another vehicle or striking a stationary object. Although this policy does not include covering medical and expenses related to drivers and occupants of the vehicle, Collision coverage is understood to provide resources to repair the insured vehicle.

Since the concluding part of the 20th century, more and more jurisdictions have made it compulsory for persons to carry full auto insurance, including a collision coverage component, unlike before where Collision insurance was once considered an optional coverage for auto insurance policies.

In most cases, the owner of the vehicle cannot renew the tag without presenting proof of insurance coverage that is at least equivalent the minimum requirements set by the jurisdiction. The driver may be fined or may lose driving privileges for a period of time, if he or she is caught operating the vehicle without having the minimum amount of insurance.

The main objective or focus of this type of coverage is on repairing the insured vehicle in the unlikely event of an accident. When it comes to damage to property or to any other vehicle involved in the accident, collision coverage does not provide any type of compensation. However, regardless of who was at fault for the accident, this coverage will provide resources to repair the insured vehicle.

Depending on the amount of coverage preferred and the insurance carrier, the coverage may have a large deductible or a small one, Normally, individuals who drive older vehicles with a lower market value, may decide on higher deductibles, since there are higher chances are that an older vehicle will soon be declared totaled by the insurance company. Newer vehicles however, usually benefit from lower deductibles since there is a better possibility that the insurance provider will clear the car for repair.

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